U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)

[ X ]  Annual report under Section 13 or 15(d) of the Securities
       Exchange Act of 1934

                    For the fiscal year ended March 29, 2002

[   ]  Transition report under Section 13 or 15(d) of the Securities
       Exchange Act of 1934

             For the transition period from __________ to__________

                          Commission file number 0-5278
                                                 ------

                                 IEH CORPORATION
           ----------------------------------------------------------
                 (Name of Small Business Issuer in Its Charter)


          New York                                           13-5549348
--------------------------------                        -------------------
(State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                           Identification No.)


140 58th Street, Suite 8E, Brooklyn, New York                      11220
----------------------------------------------                  ----------
(Address of Principal Executive Offices)                        (Zip Code)


                                 (718) 492-9673
                 -----------------------------------------------
                (Issuer's Telephone Number, Including Area Code)


Securities registered under Section 12(b) of the Exchange Act:


Title of each Class                Name of Each Exchange on Which Registered
       None                                          None

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 Par Value
                             ----------------------
                                (Title of Class)


                                        1
<PAGE>

     Indicated by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports),and (2) has been subject to such filing requirements for
past 90 days.

                       Yes   [ X ]                    No  [   ]

     Indicate by check mark if disclosure of delinquent filers in response to
Item 405 of Regulation S- B is not contained in this form, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

                       Yes   [ X ]                    No  [   ]

     The Registrant's revenues for its most recent fiscal year ended March 29,
2002 were $4,338,012.

     On June 26, 2002, the aggregate market value of the voting stock of
Registrant held by non- affiliates of Registrant (consisting of Common Stock,
$.01 par value) computed by reference to the closing price at which the stock
was sold on June 17, 2002 (the date of the last reported transaction) ($0.10)
was approximately $103,418.

     On June 26, 2002, there were 2,303,468 shares of Common Stock, $.01 par
value, issued and outstanding.


                                        2
<PAGE>

PART I

Item I.   Business

IEH Corporation (hereinafter referred to as the "Company") was organized under
the laws of the State of New York on March 22, 1943 under the name Industrial
Heat Treating Company, Inc. On March 15, 1989, the Company changed its name to
its current name. The Company's executive offices and manufacturing facilities
are located at 140 58th Street, Suite 8E, Brooklyn, New York 11220. The
Company's telephone number is (718) 492-4448; its email address is
ieh@iehcorp.com.

The Industry in Which the Company is Engaged

The Company is engaged in the design, development, manufacture and distribution
of high performance electronic printed circuit connectors and specialized
interconnection devices. Electronic connectors and interconnection devices are
used to provide connections between electronic component assemblies. The Company
develops and manufactures connectors which are designed for a variety of high
technological and high performance applications. These connectors are primarily
utilized by those users who require highly efficient and dense (the space
between connection pins within the connector) electrical connections.

Printed circuit boards in computers contain the components necessary to perform
specific system sub-functions. These functions require connections which relay
information between electronic components and circuit boards, enabling the
commands that are input by the user to be performed. Electronic connectors, in
essence, enable circuit boards and electronic components to communicate with
each other, via direct electrical connection. Connectors also are fundamental to
modular construction of electronic assemblies enabling the disconnection and
removal of circuit boards and other electronic components for testing, repair,
and replacement.

Connectors may be designed and manufactured in various shapes, sizes and
specifications to meet specific customer requirements and applications. High
performance connectors are designed to meet various density and pin count (the
number of individual connection points within each connector) criteria and to
provide low forces (the amount of pressure needed to make the connection) and
electrically efficient connections.

Constant advances in the design of solid state devices have resulted in
significantly denser component packaging configurations on circuit boards.
Historically, a 5" X 8" circuit board may have consisted of thousands of
circuits with 10 to 30 lines of communication. Under those conditions, an
insertion force of one pound per contact for each of the communication lines
formed a common and acceptable standard in connection devices. As a result of
technological developments in recent years, the same 5" X 8" circuit board may
contain hundreds of thousands of circuits with hundreds of communication lines,
and an insertion force of one (1) ounce per contact as the standard in the
industry.

The Company's Product Line

The Company primarily manufactures printed circuit board connectors that meet
military or individual customer specifications. Certain of the Company's
manufacturing and sales involve the competitive bidding process because of the
military and/or government status of customers. The Company also manufactures a
line

                                       3


<PAGE>

of standard universal connectors which have common usage in the high
technology and commercial electronics industries. The Company serves both the
commercial and military marketplace, manufacturing connectors for avionics,
electronics, satellite, radar systems, test equipment, medical electronic and
related industries.

The Company is continuously redesigning and adapting its connectors to keep pace
with developments in the electronics industry, and has, for example, developed
connectors for use with flex-circuits which are used in aerospace programs,
computers, air-borne communication systems, testing systems and other areas. The
Company also provides engineering services to its customers to assist in the
development and design of connectors to meet specific product requirements.

The Company's electronic printed circuit connectors are sold to original
equipment manufacturers and distributors. The Company supplies its connectors to
manufacturers who principally produce and distribute finished products as well
as to distributors who resell the Company's products. Prior to the decrease in
military and government spending over the last five (5) years, the Company's
sales were made primarily to the government, military defense contractors and
aerospace companies. However, since the decrease in military and government
spending, the Company has modified its product line so as to concentrate its
sales efforts to commercial electronics companies. The Company still continues
to market its connectors for use in government and military computers; military
defense equipment and information systems; terrestrial, airborne and aerospace
communications products; avionics and guidance systems and instrumental and
electronic testing equipment.

With the continuing downturn in government contracts over the last few years,
the Company has been striving the past several years to develop commercial
accounts.

Management has instituted several steps to increase productivity and increase
sales such as downsizing the labor force, implementing material changes to make
the Company's products more competitive and developing machinery and equipment
to increase production rates. Management believes these initiatives have
decreased costs and will continue to do so in the near future.

For the fiscal year ended March 29, 2002, the Company's principal customers
included manufacturers of commercial electronics products, military defense
contractors and distributors who service these markets. Sales to the commercial
electronics and military defense markets comprised 26% and 73%, respectively, of
the Company's net sales for the year ended March 29, 2002. Approximately 1% of
the Company's net sales for the year March 29, 2002, were made internationally.

New Product Development

The Company maintains a program to increase the efficiency and performance of
its connectors to meet anticipated and specific market needs. Computer and
electronics technology is continuously changing and requires the redesign and
development of connectors to adapt to these changes. Primarily, new technology
has dictated a decrease in the size of solid state electronic components and
smaller and denser high performance connectors. Management believes that a key
ingredient to the Company's success is its ability to assist customers with a
new design effort and prepare necessary drawing packages in a short period of
time. After the customer approves the design, prototypes are built, approved by
the customer and production is released. As an example, six new connectors have
been introduced to a major commercial account. The Company's design effort on
this product line began mid-year 1994 and was recently completed. The new
development process

                                       4


<PAGE>

with this commercial client has led to substantial repeat business in the past
fiscal year. The Company now has the ability to introduce this line to other
commercial accounts.

The Company has also recently commenced production of two new connectors for the
aerospace industry. To date early orders for pre-production units have been
completed and the Company is awaiting commencement of production.

One of the nation's leading radar system manufacturers has contracted with the
Company for six new designs. The design work is complete, approvals have been
obtained, and the Company is now in small-scale production. The Company
anticipates full-scale production when the radar system is released for sale by
the customer.

Several years ago, the Company designed and developed a form of compliant
termination connector, which is named, "COMTAC". This product, which utilizes
technology known as "Solderless Pin Technology", does not require the soldering
of connector pins, but instead utilizes a spring type locking system in
attaching the connector to the printed circuit board. This technology was
patented in the United States under patent No. 4,720,268 and assigned to the
Company on January 19, 1988. During the fiscal year ended March 29, 2002 sales
of the COMTAC connectors accounted for over 12% of the Company's total sales.
The Company has sent pre-production units for evaluation to certain customers
and potential customers. Although there can be no assurance of future sales, the
Company is optimistic that this new technology will lead to an increase in
sales.

Commitments

On July 22, 1992, the Company obtained a loan of $435,000 from the New York
State Urban Development Corporation ("UDC"), collateralized by machinery and
equipment. The loan is payable over ten years, with interest rates progressively
increasing from 4% to 8% per annum.

The balance remaining at March 29, 2002 was $25,289.

Aggregate future principal payments are as follows:


Fiscal Year Ending March 31:
2003                                                  $ 25,289
                                              ================

     In April 1997, the Company was informed by the UDC that the loan was sold
and conveyed to WAMCO XXIV, Ltd. All of the terms and conditions of the loan
remained in effect.

As of March 29, 2002, the Company had failed to meet one of the financial
covenants of the loan agreement; namely that the "Company shall be obligated to
maintain a tangible net worth of not less than $1,300,000 and the Company shall
be obligated to maintain a ratio of current assets to current liabilities of 1.1
to 1.0". The Company reported tangible net worth of $809,357. The ratio of
current assets to current liabilities was .99 to1.0.

The Company has applied for additional waivers of this covenant. Neither the UDC
or WAMCO XXIV has acted on these requests, nor has WACO declared an event of
default. There are no assurances that the Company will receive any additional
waivers of this covenant. Should the Company not receive any additional

                                        5

<PAGE>

waivers, then it will be deemed to be in default of this loan obligation and the
loan plus interest will become due and payable.

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan Amendments Act of 1990 (the "Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan. The Company has not taken any
action to terminate, withdraw or partially withdraw from the Plan nor does it
intend to do so in the future. Under the Act, liabilities would be based upon
the Company's proportional share of the Plan's unfunded vested benefits which is
currently not available. The amount of accumulated benefits and net assets of
such Plan also is not currently available to the Company. The total
contributions charged to operations under this pension plan were $38,384 for the
year ended March 29, 2002 and $35,707 for the year ended March 30, 2001.

As of March 29, 2002, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $73,828. The total amount due of $73,828 is reported on the
accompanying balance sheet in as follows, $30,000 as a current liability and
$43,828 as a long term liability. In December 1993, the Company and Local 259
entered into a verbal agreement whereby the Company would satisfy this debt by
the following payment schedule:

The sum of $2,500 will be paid by the Company each month in satisfaction of the
current arrears until this total debt has been paid. Under this agreement, the
projected payment schedule for arrears will satisfy the total debt in 30 months.

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC have agreed to the terms of a settlement of the matter.
The agreement was effective July 2, 2001. Under the agreement, the Company and
the PBGC agreed on a total sum of $244,000. The Company has agreed to make
payments as follows:


       September 1, 2003 to August 1, 2004       $2,000 per month
       September 1, 2004 to August 1, 2006       $3,000 per month
       September 1, 2006 to August 1, 2007       $4,000 per month


                                       6
<PAGE>


In addition, the Company will make balloon payments of $25,000 each on the
following dates:


        January 1, 2004
        May 1, 2004
        May 1, 2005
        January 1, 2006

The Company also granted the PBGC a lien on the Company's machinery and
equipment, subject to the preexisting liens in favor of the UDC.

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as a long term liability. The resultant gain of
$294,506 was reclassified and accounted for as a charge to opening retained
earnings as follows:


Opening retained earnings-March 31, 2000                  $ 2,221,574
Gain on pension plan settlement                               294,506
                                                          -----------

Adjusted opening retained earnings March 31, 2000          (1,927,068)

Net income for the year ended March 30, 2001                   26,826
                                                          -----------
Adjusted retained earnings balance at March 30, 2001       (1,900,242)

Net loss for the year ended March 29, 2002                    (58,009)
                                                          -----------

Balance at March 29, 2002                                 $(1,958,251)
                                                          ===========


The market for connectors and interconnection devices, domestic and worldwide,
is highly fragmented as a result of the manufacture by many companies of a
multitude of different types and varieties of connectors. For example,
connectors include: printed circuit, rectangular I/O, circular, planar (IOC) RF
coax, IC socket and fiber optic. The Company has been servicing a niche in the
market by manufacturing HYPERTAC (TM) connectors and innovative Company-designed
printed circuit connectors, such as the COMTAC connectors. Previously, the
Company was one of only three licensed manufacturers of the HYPERTAC (TM) design
in the United States. In the fiscal year 1996, the Company learned that the
other two licensees had merged. Moreover, the Company, based upon advice of
counsel, determined that the HYPERTAC technology was no longer protected by a
patent, and therefore was in the public domain. As a result, the Company
notified the licensor that it would no longer be bound by the terms of its
license agreement and the Company ceased making license payments. See Financial
Statements and Notes thereto. The Company has received a brief notice from the
licensor that it disputed the Company's interpretations and demanded return of
certain equipment. No legal proceedings have been instituted by the licensor and
the Company has not received any further notices. The Company does not
anticipate manufacturing other types of connectors in the immediate future. The
Company is continuously experimenting with innovative connection designs, which
may cause it to alter its marketing plans in the future if a market should
develop for any of its current or future innovative designs.

The Company's products are marketed to original equipment manufacturers directly
and through distributors serving primarily the government, military, aerospace
and commercial electronics markets. The Company is also involved in developing
new connectors for specific uses which result from changes in technology. The

                                       7

<PAGE>


Company assists customers in the development and design of connectors for
specific customer applications. This service is marketed to customers who
require the development of connectors and interconnection devices specially
designed to accommodate the customers own products.

The Company is primarily a manufacturer and its products are essentially basic
components of larger assemblies of finished goods. Approximately 94% of the
Company's net sales for the years ended March 29, 2002 and March 30, 2001,
respectively, were made directly to manufacturers of finished products with the
balance of the Company's products sold to distributors. Distributors often
purchase connectors for customers who do not require large quantities of
connectors over a short period of time but rather require small allotments of
connectors over an extended period of time.

One (1) of the Company's customers accounted for 17% and 19% of the Company's
net sales for the years ended March 29, 2002 and March 30, 2001, respectively.

The Company currently employs 16 independent sales representatives to market its
products in all regions in the United States. These independent sales
representatives also promote the product lines of other electronics
manufacturers; however, they do not promote the product lines of competitors
which compete directly with the Company's products. These sales representatives
accounted for approximately 94% of Company sales (with the balance of Company
sales being generated via direct customer contact) for the year ended March 29,
2002.

International sales accounted for less than 1% of sales for the years ended
March 29, 2002 and March 30, 2001.

Backlog of Orders/Capital Requirements

The backlog of orders for the Company's products amounted to approximately
$2,200,000 at March 29, 2002, as compared to $1,500,000 at March 30, 2001. A
significant portion of these orders are subject to cancellation or postponement
of delivery dates and, therefore, no assurance can be given that actual sales
will result from these orders. The Company does not foresee any problems which
would prevent it from fulfilling its orders.

Competition

The design, development, manufacture and distribution of electrical connectors
and interconnection devices is a highly competitive field. The Company
principally competes with companies who produce high performance connectors in
printed circuits and wireboards for high technology application. The Company
competes with respect to their abilities to adapt certain technologies to meet
specific product applications; in producing connectors cost-effectively; and in
production capabilities. In addition, there are many companies who offer
connectors with designs similar to those utilized by the Company and are direct
competitors of the Company.

The primary basis upon which the Company competes is product performance and
production capabilities. The Company usually receives job orders after
submitting bids pursuant to customer-issued specifications. The Company also
offers engineering services to its customers in designing and developing
connectors for specialized products and specific customer applications. This
enables the Company to receive a competitive advantage over those companies who
basically manufacture connectors based solely or primarily on cataloged
specifications. Many of the Company's competitors have greater financial
resources, market penetration and

                                        8


<PAGE>

experience than the Company and no assurances can be given that the Company will
be able to compete effectively with these companies in the future.

Suppliers of Raw Materials and Component Parts

The Company utilizes a variety of raw materials and manufactured component parts
which it purchases from various suppliers. These materials and components are
available from numerous sources and the Company does not believe that it will
have a problem obtaining such materials in the future. However, any delay in the
Company's ability to obtain necessary raw materials and component parts may
affect its ability to meet customer production needs. In anticipation of such
delays, the Company carries an inventory of raw materials and component parts to
avoid shortages and to insure continued production.

Engineering/Research & Development

The Company provides personalized engineering services to its customers by
designing connectors for specific customer applications. The employment of
electromechanical engineers is the anticipated cornerstone of the Company's
future growth. The Company maintains a testing laboratory where its engineers
experiment with new connector designs based on changes in technology and in an
attempt to create innovative, more efficient connector designs.


The Company expended $47,600 and $32,800 for the years ended March 29, 2002 and
March 30, 2001, respectively, on Company sponsored research and development
activities relating to the development of new designs, techniques and the
improvement of existing designs. In addition, the Company received $47,600 in
revenues for the year ended March 29, 2002 and no revenues for the year ended
March 30, 2001, respectively, pursuant to customer sponsored research
activities.

Employees

The Company presently employs approximately 68 people, three (2) of whom are
executive officers; three (2) are engaged in management activities; four (4)
provide general and administrative services and approximately 60 are employed in
manufacturing and testing activities. The employees engaged in manufacturing and
testing activities are covered by a collective bargaining agreement with the
United Auto Workers of America, Local 259 (the "Union") which expires on March
31, 2002. The Company believes that it has a good relationship with its
employees and the Union.

Patents and Licenses

Electrical connectors and interconnection devices are usually the subject of
standard designs; therefore, only innovations of standards designs or the
discovery of a new form of connector are patentable. The Company is continuously
attempting to develop new forms of connectors or adaptations of current
connector designs in an attempt to increase performance and decrease per unit
costs. The Company has developed and designed the COMTAC connector which was
patented on January 19, 1988, at which time the patent was assigned to the
Company.

                                        9
<PAGE>


Governmental Regulations

The Company is subject to federal regulations under the Occupational Safety and
Health Act ("OSHA") and the Defense Electrical Supply Command ("DESC"). OSHA
provides federal guidelines and specifications to companies in order to insure
the health and safety of employees. DESC oversees the quality and specifications
of products and components manufactured and sold to the government and the
defense industry. Although DESC continuously requires suppliers to meet changing
specifications, the Company has not encountered any significant problems meeting
such specifications and its products have, in the past, been approved. The
Company is unaware of any changes in the government's regulations which are
expected to materially affect the Company's business.


                                        10

<PAGE>

Item 2. Properties

The Company exercised its option to renew its lease on the premises for 10
years. The original lease ran through August 23, 2001.

The Company is obligated under this renewal through August 23, 2011, at minimum
annual rentals as follows:


             Fiscal year ending March:

             2003                            $111,600
             2004                             111,600
             2005                             111,600
             2006                             111,600
             2007                             111,600
             2008                             111,600
             2009                             111,600
             2010                             111,600
             2011                              74,400
                                             --------

                                             $967,200
                                             ========

The terms of the renewal are presently being negotiated by the Company and its
landlord, Apple Industrial Development, Corp.

The Company leases approximately 20,400 feet of space, of which it estimates;
6,000 square feet are used as executive, sales and administrative offices,
14,400 square feet are used for its manufacturing and plating.

The rental expense for the year ended March 29, 2002 for this lease was
$111,482. In addition to the base rent, the Company pays real estate taxes,
insurance premiums and utility charges relating to the use of the premises. The
Company considers its present facilities to be adequate for its present and
anticipated future needs. See "Legal Proceedings" for certain matters involving
the Company's operating facility and offices.

Item 3. Legal Proceedings

The Company is not a party to or aware of any pending or threatened legal
proceedings which would result in any material adverse effect on its operations
or its financial condition.

As previously reported, the Company reached an agreement with its landlord,
Apple Industrial Development Corp. to settle certain matters related to the
lease of its principal offices located in Brooklyn, New York, including a
lawsuit brought by the landlord against the Company. The landlord claimed that
IEH had not paid the proper rent due under its lease for the period from
September 1, 1992 through April 1997. The landlord claimed damages of $236,000
plus interest of approximately $41,000.

The Company determined it was in its best interest to settle the lawsuit. The
parties agreed to a settlement, effective as of May, 1997 whereby the Company
agreed to a repayment schedule for the amount due payable with interest at 8.25%
per year. The monthly installments equalled approximately $5,790 per month. The
settlement provided for the entity, following notice and a cure period, of a
default judgement by the landlord in the event the Company fails to pay amounts
due under the lease and the settlement in a timely fashion. The total amount was
paid in full June 2000.


                                       11
<PAGE>


Item 4. Submission of Matters to Vote ofSecurity Holders

No matters were submitted to shareholders during the fourth quarter for the
fiscal year ended March 29, 2002.

Item 5. Market for Common Equity and Related Stockholder Matters

Principal Market

The Common Stock of the Registrant (the "Common Stock") is traded in the
Over-The-Counter Market and is quoted on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") System Bulletin Board under the symbol
"IEHC"). On January 11, 1993, the Company's Common Stock was deleted from
listing on the NASDAQ SmallCap Market System because of the Company's failure to
maintain the minimum asset and shareholders equity requirements. On January 12,
1993, the Company's Common Stock was first quoted over the Electronic Bulletin
Board (OTCBB).

Market Information

The range of high and low bid prices for the Company's Common Stock, for the
periods indicated as set forth below. For the period to October 29, 1991, the
Company was listed on the NASDAQ National Market System. On October 29, 1991,
the Company's Common Stock was delisted from the NASDAQ National Market System
and from October 29, 1991 to January 11, 1993, the Company's Common Stock was
listed on the NASDAQ SmallCap Market System. On January 11, 1993, the Company's
Common Stock was delisted from the NASDAQ SmallCap Market System and on January
13, 1993, the Company's Common Stock was first quoted over the Electronic
Bulletin Board (OTCBB). Set forth below is a table indicating the high and low
prices of the Common Stock during the periods indicated.


                          Year                        High              Low

          Fiscal Year ended March 29, 2002

          1st Quarter                                  $.20              $.11
          2nd Quarter                                   .23               .14
          3rd Quarter                                   .15               .14
          4th Quarter                                   .20               .13

          Fiscal Year ended March 30, 2001 (1)

          1st Quarter                                 .6875             .1562
          2nd Quarter                                  .875             .25
          3rd Quarter                                   .25             .125
          4th Quarter                                 .6875             .1250


          As reported by the OTCBB.

The above quotations, as reported, represent prices between dealers and do not
include retail mark-ups, mark- downs or commissions. Such quotations do not
necessarily represent actual transactions.

On June 17, 2002 the high price for the Common Stock was $.10 and the low bid
was $.10.

                                       12

<PAGE>

Dividends

The Company has not paid any cash dividends on its Common Stock during the last
five (5) fiscal years. At present, the Company does not anticipate issuing any
cash dividends on its Common Stock in the foreseeable future by reason of its
contemplated future financial requirements and business plans. The Company will
retain earnings, to the extent that there are any, to finance the development of
its business.

Approximated Number of Equity Security Holders

The number of record holders of the Company's Common Stock as of June 25, 2002
was approximately 773. Such number of record owners was determined from the
Company's stockholder records, and does not include the beneficial owners of the
Company's Common Stock whose shares are held in the names of various security
holders, dealers and clearing agencies.

Equity Compensation Plan Information

The Board of Directors unanimously approved adoption of the 2001 Employee Stock
Option Plan (the "2001 Plan") to provide for the grant of options to purchase up
to 750,000 shares of the Company's common stock to all employees, including
senior management and other eligible persons. Under the terms of the proposed
2001 Plan, options granted thereunder may be designated as options which qualify
for incentive stock option treatment ("ISOs") under Section 422 of the Code, or
options which do not so qualify ("Non-ISO's"). The 2001 Plan was approved by
shareholders at the annual meeting held on September 21, 2002.

No options have been issued under the Plan. The Company has no other equity
compensation plan under which equity securities are authorized for issuance and
no equity securities have been issued as compensation during the fiscal year
ended March 29, 2002.


                                       13
<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Statements contained in this report which are not historical facts may be
considered forward looking information with respect to plans, projections, or
future performance of the Company as defined under the Private Securities
litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties which could cause actual results to differ materially
from those projected. The words "anticipate," "believe", "estimate", "expect,"
"objective," and "think" or similar expressions used herein are intended to
identify forward-looking statements. The forward-looking statements are based on
the Company's current views and assumptions and involve risks and uncertainties
that include, among other things, the effects of the Company's business, actions
of competitors, changes in laws and regulations, including accounting standards,
employee relations, customer demand, prices of purchased raw material and parts,
domestic economic conditions, including housing starts and changes in consumer
disposable income, and foreign economic conditions, including currency rate
fluctuations. Some or all of the facts are beyond the Company's control.

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related footnotes which provide additional
information concerning the Company's financial activities and condition.

Accounting Policies

Accounting Period:

The Company maintains an accounting period based upon a 52-53 week year which
ends on the nearest Friday in business days to March 31st. The year ended March
29, 2002 was comprised of 52 weeks and the year ended March 30, 2001 was
comprised of 53 weeks.

Revenue Recognition:

Revenues are recognized at the shipping date of the Company's products.

The Company's policy with respect to customer returns and allowances as well as
product warranty is as follows:

The Company will accept a return of defective product within one year from
shipment for repair or replacement at the Company's option.

If the product is repairable, the Company at its own cost will repair and return
it to the customer. If unrepairable, the Company will either offer an allowance
against payment or will reimburse the customer for the total cost of the
product.

Most of the Company's products are custom ordered by customers for a specific
use. The Company provides engineering services as part of the relationship with
its customers in developing the custom product. The Company is not obligated to
provide such engineering service to its customers. The Company does not charge
separately for these services.

Inventories:

                                       14
<PAGE>

Inventories are stated at cost, on a first-in, first-out basis, which does not
exceed market value.


Concentration of Credit Risk:

The Company maintains cash balances at one bank. Amounts on deposit are insured
by the Federal Deposit Insurance Corporation up to $100,000 in aggregate. There
were no uninsured balances at either March 29, 2002 or March 30, 2001.

Property, Plant and Equipment:

Property, plant and equipment is stated at cost less accumulated depreciation
and amortization. The Company provides for depreciation and amortization using
the Modified Accelerated Cost Recovery System (MACRS) method over the estimated
useful lives (5-7 years) of the related assets.

Maintenance and repair expenditures are charged to operations, and renewals and
betterments are capitalized. Items of property, plant and equipment which are
sold, retired or otherwise disposed of are removed from the asset and
accumulated depreciation or amortization account. Any gain or loss thereon is
either credited or charged to operations.

Income Taxes:

The Company follows the policy of treating investment tax credits as a reduction
in the provision for federal income tax in the year in which the credit arises
or may be utilized. Deferred income taxes arise from temporary differences
resulting from different depreciation methods used for financial and income tax
purposes. The Company has adopted Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes".

Net Income Per Share:

The Company has adopted the provisions of SFAS No. 128, "Earnings Per Share",
which requires the disclosure of "basic" and "diluted" earnings (loss) per
share. Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during each period.

Net Income Per Share:

Diluted earnings per share is similar to basic earnings per share except that
the weighted average number of common shares outstanding is increased to reflect
the dilutive effect of potential common shares, such as those issuable upon the
exercise of stock or warrants, as if they had been issued. For the years ended
March 29, 2002 and March 30, 2001, there were no items of potential dilution
that would impact on the computation of diluted earnings or loss per share.

Fair Value of Financial Instruments:

The carrying value of the Company's financial instruments, consisting of
accounts receivable, accounts payable, and borrowings, approximate their fair
value due to the relatively short maturity (three months) of these instruments.

                                       15
<PAGE>

Use of Estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, revenues and expenses,
and disclosure of contingent assets and liabilities at the date of the financial
statements. Actual amounts could differ from those estimates.

Impairment of Long-Lived Assets:

SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To Be Disposed
Of", requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company has adopted SFAS No. 121. There were no long-lived
asset impairments recognized by the Company for the years ended March 29, 2002
and March 30, 2001.

Reporting Comprehensive Income:

The Company has adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income". This statement established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in an entity's financial statements. This Statement requires an entity to
classify items of other comprehensive income by their nature in a financial
statement and display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position. There were no material items of
comprehensive income to report for the years ended March 29, 2002 and March 30,
2001.

Segment Information:

The Company has adopted the provisions of SFAS No. 131, "Disclosures About
Segment of An Enterprise and Related Information." This Statement requires
public enterprises to report financial and descriptive information about its
reportable operating segments and establishes standards for related disclosures
about product and services, geographic areas, and major customers. The adoption
of SFAS No. 131 did not affect the Company's presentation of its results of
operations or financial position.


                                       16
<PAGE>

Results of Operations

The following table sets forth for the periods indicated, percentages for
certain items reflected in the financial data as such items bear to the revenues
of the Company:


                         Relationship to Total Revenues

                                                   March 29,       March 30,
                                                     2002            2001
                                                   --------        --------

Operating Revenues (in thousands)                 $   4,338       $   4,594
                                                   --------        --------

Operating Expenses:
  (as a percentage of Operating Revenues)

          Costs of Products Sold                       73.9%           71.0%
            Selling, General and Administrative        18.7%           19.0%
            Interest Expense                            3.3%            3.4%
            Depreciation and amortization               5.6%            6.0%
                                                   --------        --------

                   TOTAL COSTS AND EXPENSES           101.5%           99.4%
                                                   --------        --------

Operating Income (loss)                                (1.5%)            .6%

Other Income                                             .2              .1%
                                                   --------        --------

Income (loss) before Income Taxes                      (1.3%)            .7%

Income Taxes                                             --             (.1%)
                                                   --------        --------

Net Income (loss)                                      (1.3%)            .6%
                                                   ========        ========



Year End Results: March 29, 2002 vs. March 30, 2001

Operating revenues for the year ended March 29, 2002 amounted to $4,338,012
reflecting a 5.6% decrease versus prior year 2001 revenues of $4,593,840. The
decrease in revenues is a direct result of the down turn in the economy.

The Company is primarily a manufacturer and its products are essentially basic
components of larger assemblies of finished goods. Approximately 94% of the
Company's net sales for the fiscal year ended March 29, 2002 and March 30, 2001
respectively were made directly to manufacturers of finished products with the
balance of the Company's products sold to distributors. Distributors often
purchase connectors for customers who do not require large quantities of
connectors over a short period of time but rather require small allotments of
connectors over an extended period of time.


                                       17

<PAGE>

For the fiscal year ended March 29, 2002, one of the Company's customers
accounted for approximately 17% of total sales. The same customer accounted for
approximately 19% of sales in the fiscal year ended March 30, 2001.

The Company currently employs 16 independent sales representatives to market its
products in all regions of the United States. These sales representatives
accounted for approximately 94% of the Company's sales, with the balance of
sales being generated by direct customer contact.

For the fiscal year ended March 29, 2002, the Company's principal customers
included manufacturers of commercial electronic products, military defense
contractors and distributors who service these markets. Sales to the commercial
electronic and military defense markets comprised 26% and 73% of the Company's
net sales for the years ended March 29, 2002 and March 30, 2001 respectively.
Approximately 1% of net sales were made to international customers.

Cost of products sold amounted to $3,207,645 for the fiscal year ended March 29,
2002, or 73.9% of operating revenues. This reflected a $53,548 or 1.6% decrease
in the cost of products sold from $3,261,193 or 71.0% of operating revenues for
the fiscal year ended March 30, 2001. This marginal decrease is due primarily to
the reduction in sales.

Selling, general and administrative expenses were $808,935 and $871,844 or 18.7%
and 19.0% of operating revenues for the fiscal years ended March 29, 2002 and
March 30, 2001, respectively. This category of expense decreased by $62,909 or
7.2% from the prior year. The decrease can be attributed to a reduction in sales
commissions.

Interest expense was $143,909 for the fiscal year ended March 29, 2002 or 3.3%
of operating revenues. For the fiscal year ended March 30, 2001, interest
expense was $154,874 or 3.4% of operating revenues. The decrease of $10,965 or
7.1% reflects less equipment loans entered into during the year ended March 29,
2002.

Year End Results: March 29, 2002 vs. March 30, 2001

Depreciation and amortization of $244,350 or 5.6% of operating revenues was
reported for the fiscal year ended March 29, 2002. This reflects a decrease of
$31,387 or 11.38% from the prior year ended March 30, 2001 of $275,737 or 6.0%
of operating revenues. The decrease is the result of several fixed assets being
fully depreciated during the current fiscal year.

The Company reported a net loss of $58,009 for the year ended March 29, 2002
representing basic loss of $.03 per share as compared to a net income of $26,826
or $.012 per share for the year ended March 30, 2001. The net income decrease
for the current year can, in part, be attributed to a down turn in the economy.

Liquidity and Capital Resources

The Company reported a working capital deficit of $23,592 as of March 29, 2002
compared to a working capital deficit of $70,828. The increase in working
capital of $47,236 was attributable to the following items:


Net income (loss)  (excluding depreciation and amortization)          186,341
Capital expenditures                                                 (153,166)
Other transactions                                                     14,061

                                       18

<PAGE>

As a result of the above, the current ratio (current assets to current
liabilities) was .99 to 1 at March 29, 2002 as compared to .96 to 1 at March 30,
2001. Current liabilities at March 29, 2002 were $1,851,735 compared to
$1,835,816 at March 30, 2001.

The Company reported $153,166 in capital expenditures in fiscal 2001 and
reported depreciation of $209,499 for the year ended March 29, 2002.

The net loss of $58,009 for the year ended March 29, 2002 reduced stockholders'
equity to $809,357 as compared to stockholders' equity of $867,366 at March 30,
2001.

The Company has an accounts receivable financing agreement with a factor which
bears interest at 2.5% above prime with a maximum of 12% per annum. At March 29,
2002 the amount outstanding with the factor was $676,181 as compared to $759,937
at March 30, 2001.

On July 22, 1992, the Company obtained a loan of $435,000 from the New York
State Urban Development Corporation ("UDC"), collateralized by machinery and
equipment. The loan is payable over ten years, with interest rates progressively
increasing from 4% to 8% per annum. The balance remaining at March 29, 2002 was
$25,289.

Aggregate future principal payments are as follows:


Fiscal Year Ending March 31:
2003                                                  $  25,289
                                              =================

     In April 1997, the Company was informed by the UDC that the loan was sold
and conveyed to WAMCO XXIV, Ltd. All the terms and conditions of the loan
remained in effect.

As of March 29, 2002, the Company had failed to meet one of the financial
covenants of the loan agreement; namely that the "Company shall be obligated to
maintain a tangible net worth of not less than $1,300,000 and the Company shall
be obligated to maintain a ratio of current assets to current liabilities of 1.1
to 1.0.

The Company reported tangible net worth of $809,357. The ratio of current assets
to current liabilities was .99 to 1.0.

The Company has applied for additional waivers of this covenant. Neither the UDC
or WAMCO XXIV has acted on these requests. There are no assurances that the
Company will receive any additional waivers of this covenant. Should the Company
not receive any additional waivers, then it will be deemed to be in default of
this loan obligation and the loan plus interest will become due and payable,
accordingly the entire balance has been classified as a current liability in the
accompanying balance sheet.

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan Amendments Act of 1990 ("The Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan. The Company has not taken any
action to

                                       19
<PAGE>

terminate, withdraw or partially withdraw from the Plan nor does it intend to do
so in the future. Under the Act, liabilities would be based upon the Company's
proportional share of the Plan's unfunded vested benefits which is currently not
available. The amount of accumulated benefits and net assets of such Plan also
is not currently available to the Company. The total contributions charged to
operations under this pension plan were $38,384 for the year ended March 29,
2002 and $35,707 for the year ended March 30, 2001.

As of March 29, 2002, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $73,828. This amount is reported in two parts on the
accompanying balance sheet as follows, $30,000 as a current liability and
$43,828 as a long term liability.

In December 1993, the Company and Local 259 entered into a verbal agreement
whereby the Company would satisfy this debt by the following payment schedule:

The sum of $2,500 will be paid by the Company each month in satisfaction of the
current arrears until this total debt has been paid. Under this agreement , the
projected payment schedule for arrears will satisfy the total debt in 30 months.
Additionally, both parties have agreed that current obligatory funding for the
Pension Plan will be made on a timely current basis.

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA") that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC have agreed to the terms of a settlement of the matter.
The agreement is effective July 2, 2001. Under the agreement, the Company and
the PBGC agreed on a total sum of $244,000. The Company has agreed to make
payments as follows:


     September 1, 2003 to August 1, 2004                     $2,000 per month
     September 1, 2004 to August 1, 2006                     $3,000 per month
     September 1, 2006 to August 1, 2007                     $4,000 per month

In addition, the Company will make balloon payments of $25,000 each on the
following dates:


     January 1, 2004
     May 1, 2004
     May 1, 2005
     January 1, 2006

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the preexisting liens in favor of the UDC.

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as a long term liability. The resultant gain of
$294,506 was reclassified and accounted for as a charge to opening retained

                                       20
<PAGE>

earnings as follows:


Opening retained earnings-March 31, 2000                  $(2,221,574)
Gain on pension plan settlement                               294,506
                                                          -----------

Adjusted opening retained earnings March 31, 2000          (1,927,068)

Net income for the year ended March 30, 2001                   26,826
                                                          -----------
Adjusted retained earnings balance at March 30, 2001       (1,900,242)

Net loss for the year ended March 29, 2002                    (58,009)
                                                          -----------

Balance at March 29, 2002                                 $(1,958,251)
                                                          ===========

The Company's shareholders voted on September 21, 2001 to change the par value
of the Company's common stock from $.50 par value per share to $.01 par value
per share.

As a result of the above change the Company reduced the book value of it's
common stock and increased capital in excess of par as follows:


                               Par Value                          Par Value
                                 $.50            Change             $.01
                              -----------      -----------       -----------

Common Stock                  $ 1,151,734      $(1,128,699)      $    23,035
Capital in excess of par        1,615,874        1,128,699         2,744,573
                              -----------      -----------       -----------
Total equity                  $ 2,767,608      $         0       $ 2,767,608
                              ===========      ===========       ===========

On September 21, 2001 the Company's shareholders approved the adoption of the
Company's 2001 Employees Stock Option Plan to provide for the grant of options
to purchase up to 750,000 shares of the Company's common stock to all employees,
including senior management.

Options granted to employees under this plan may be designated as options which
qualify for incentive stock option treatment under Section 422A of the Internal
Revenue Code, or option which do not so qualify.

Under this plan, the exercise price of an option designated as an Incentive
Stock Option shall not be less than the fair market value of the Company's
common stock on the day the option is granted. In the event an option designated
as an incentive stock option is granted to a ten percent (10%) share holder,
such exercise price shall be at least 110 Percent (110%) of the fair market
value or the Company's common stock and the option must not be exercisable after
the expiration of five years from the day of the grant.

Exercise prices of non incentive stock options may be less than the fair market
value of the Company's common stock.

The aggregate fair market value of shares subject to options granted to a
participants, which are designated as incentive stock options, and which become
exercisable in any calendar year, shall not exceed $100,000. As of March 29,
2002 no options had been granted under the plan.


                                       21
<PAGE>

Effects of Inflation

The Company does not view the effects of inflation to have a material effect
upon its business. Increases in costs of raw materials and labor costs have been
offset by increases in the price of the Company's products, as well as
reductions in costs of production, reflecting management's efforts in this area.
While the Company has in the past increased its prices to customers, it has
maintained its relatively competitive price position. However, significant
decreases in government, military subcontractor spending has provided excess
production capacity in the industry which in turn has tightened pricing margins.

Item 7. Financial Statements

See Index to Financial Statements attached hereto.

Item 8. Changes in and Disagreements with Accountants on Accounting Financial
Disclosure.

The Company had no disagreements with its accountants during the last two fiscal
years.


                                    PART III


Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
 with Section 16 (a) of the Exchange Act

The executive officers and directors of the Company are as follows:


             Name     Age                           Office

Michael Offerman      61      Chairman of the Board of Directors and President

Robert Knoth          60      Secretary and Treasurer

Murray Sennet         79      Director

Allen Gottlieb        61      Director

Robert Pittman        77      Director



All directors serve for a term of two years and until their successors are duly
elected. All officers serve at the discretion of the Board of Directors.

Executive Officers and Directors

Michael Offerman has been a member of the Board of Directors since 1973. In May,
1987, Mr. Offerman was

                                       22

<PAGE>

elected President of the Company and has held that position since that date.
Prior to his becoming President, Mr. Offerman served as Executive Vice-President
of the Company.

Robert Knoth joined the Company as Controller in January, 1990 and was elected
treasurer of the Company in March, 1990. Mr. Knoth was elected as Secretary of
the Company in September 1992 and Mr. Knoth has held these positions since said
dates. From 1986 to January, 1990, Mr. Knoth was employed as controller by G&R
Preuss, Inc., a company engaged in the business of manufacturing truck bodies
and accessories.

Murray Sennet has been a member of the Company's Board of Directors since 1970.
Mr. Sennet was the Secretary and the Treasurer of the Company at the time of his
retirement in April, 1986.

Allen Gottlieb has been a member of the Company's Board of Directors since 1992.
Mr. Gottlieb has been an attorney in private practice for over five (5) years.

Robert Pittman has been a member of the Board of Directors since 1987. Mr.
Pittman retired in October 1992, at which time he had held the position of
Vice-President of Engineering and Secretary of the Company.

Significant Employees

Joan Prideaux joined the Company in July 1995 as national sales manager and also
served as a vice president. Ms. Prideaux resigned as an executive officer in
January 2002 but continues to serve as national sales manager.

Mark Iskin is the Director of Purchasing, a position he has held since September
2000. Prior to joining the Company, Mr. Iskin worked as a materials and
purchasing specialist in manufacturing and distribution companies. In his last
position with an industrial distributor, Mr. Iskin was responsible for
purchasing and managing vendors for the cutting tool section of the catalog. In
addition he participated in setting up and developing the company's
forecasting/planning software related to that department procedures.

Jeff (Yefim) Berenstein is the quality control manager, a position he started on
April 16, 2001. Prior to joining the Company Mr. Berenstein worked as a quality
assurance specialist for various manufacturing companies where he was
responsible for the implementation of quality systems - ISI-9000, Mil-I-45208A
writing quality manuals, quality procedures, work instructions, design special
gigs, testing equipment to improve quality of the manufacturing products,
maintaining and supervising calibration and calibration recall systems.

Certain Reports

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers and persons who own, directly or indirectly, more than
10% of a registered class of the Corporation's equity securities, to file with
the Securities and Exchange Commission ("SEC") reports of ownership and reports
of changes in ownership of Common Stock of the Corporation.

Officers, directors and greater than 10% shareholders are required to furnish
the Company with copies of all Section 16(a) reports that they file. Based
solely on review of the copies of such reports received by the Company, the
Company believes that filing requirements applicable to officers, directors and
10% shareholders were complied with during the fiscal year.



                                       23

<PAGE>

The following table sets forth below the summary compensation paid or accrued by
the Corporation during the fiscal years ended March 29, 2002, March 30, 2001,
and March 31, 2000 for the Corporation's Chief Executive Officer:

<TABLE>
<CAPTION>
                                                                                    Other Annual
Name and Principal Position                   Year           Salary       Bonus     Compensation
                                         ---------------    ---------    --------  ---------------
Michael Offerman, Chief Executive
<S>                                       <C>                <C>            <C>             <C>
Officer, President (1)                    March 29, 2002     $ 95,500       --              0
                                          March 30, 2001       91,431       --              0
                                          March 31, 2000       77,788       --              0
</TABLE>


     During the years ended March 29, 2002, March 30, 2001 and March 31, 2000,
the Corporation provided automobile allowances to Mr. Offerman. This does not
include the aggregate incremental cost to the Corporation of such automobile or
automobile allowances. The Corporation is unable to determine without
unreasonable effort and expense the specific amount of such benefit, however,
the Corporation has concluded that the aggregate amounts of such personal
benefit for Mr. Offerman does not exceed $25,000 or 10% of the compensation
reported as total salary and bonus reported. Effective January 1, 1995, Mr.
Offerman entered into an employment agreement with the Company to increase his
salary to $100,000 per annum. Mr. Offerman agreed that, not withstanding the
terms of his new employment agreement, he was paid at the rate of $95,500 for
fiscal 2002. This agreement expired in fiscal year 2000 and as of March 29, 2002
the Company has not negotiated a new contract with Mr. Offerman.

No other officer of the Corporation received compensation (salary and bonus) in
excess of $100,000 during the fiscal years ended March 29, 2002, or March 30,
2001 or March 31, 2000.

Pension/Benefit Incentive Plan

In 1964, the Corporation's Shareholders and Board of Directors adopted a
contributory pension plan (the "Salaried Pension Plan") effective April 1, 1964,
for salaried employees of the Corporation. The Salaried Pension Plan as revised
on April 1, 1987, provides for retirement benefits for qualified employees upon
or prior to retirement.

For early retirement, employees are eligible to receive a portion of their
retirement benefits, starting 10 years prior to the employees anticipated normal
retirement age (age 65), if the employee has completed 15 years of service to
the Corporation. The employee is eligible to receive reduced retirement benefits
based on an actuarial table for a period not exceeding ten (10) years of his
lifetime. In no event would benefits exceed $12,000 per year.

For normal retirement at the age of sixty-five (65) the employee is entitled to
receive full retirement benefits for a period not exceeding ten (10) years of
his lifetime. If the employee should die prior to the ten-year period, his
beneficiaries will continue to receive the full benefit for the remainder of the
ten-year term. In no event will benefits exceed $12,000 per year.

If payment is made on the "joint and survivor basis" as elected by the employee,
benefits will be provided to both the employee and spouse on a reduced basis
over the life of both the employee and his spouse. If the employee should die
prior to the guaranteed ten year period, the spouse will receive the employee
benefit for

                                       24

<PAGE>

the remainder of the term, after which, the spouse will received the reduced
spousal benefit for the life of the spouse. In no event will the benefits
pursuant to the joint and survivor basis exceed $12,000 per year.

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA"), that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC negotiated a settlement on the entire matter and on
July 2, 2001, an agreement was reached whereby the Company's liability to the
PBGC was reduced to $244,000. The Company will make monthly payments to the PBGC
as follows:


      September 1, 2003 to August 1, 2004                    $2,000 per month
      September 1, 2004 to August 1, 2006                    $3,000 per month
      September 1, 2006 to August 1, 2007                    $4,000 per month

In addition, to the above referenced monthly payments, the Company will make
balloon payments of $25,000 each on the following dates:


      January 1, 2004
      May 1, 2004
      May 1, 2005
      January 1, 2006

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the pre- existing liens in favor of the UDC.

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as a long term liability. The resultant gain of
$294,506 was reclassified and accounted for as a charge to opening retained
earnings as follows:


Opening retained earnings-March 31, 2000                     $  (2,221,574)
Gain on pension plan settlement                                    294,506
                                                            ---------------

Adjusted opening retained earnings March 31, 2000               (1,927,068)

Net income for the year ended March 30, 2001                        26,826
                                                            ---------------
Adjusted retained earnings balance at March 30, 2001            (1,900,242)

Net loss for the Year ended March 29, 2002                         (58,009)
                                                            ---------------

Balance at March 29, 2002                                       (1,958,251)
                                                            ===============

                                       25

<PAGE>


Cash Bonus Plan

In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for Executive
Officers. Contributions to the Bonus Plan are made by the Company only after
pre-tax operating profits exceed $150,000 for a fiscal year, and then to the
extent of 10% of the excess of the greater of $150,000 of 25% of pre-tax
operating profits. There were no contributions to the Bonus Plan for the fiscal
years ended March 29, 2002, March 30, 2001, and March 31, 2000.

2001 Employee Stock option Plan

     During the fiscal year ended March 29, 2002 the Board of Directors
unanimously approved the adoption of the 2001 Employee Stock Option Plan (the
"2001 Plan") to provide for the grant of options to purchase up to 750,000
shares of the Company's common stock to all employees, including senior
management and other eligible persons. Under the terms of the proposed 2001
Plan, options granted thereunder may be designated as options which qualify for
incentive stock option treatment ("ISOs") under Section 422 of the Code, or
options which do not so qualify ("Non-ISO's"). The 2001 Plan was submitted to,
and approved by, the shareholders of the Corporation at the Annual Meeting held
on September 21, 2002.

     The 2001 Plan is administered by the Board of Directors. The Board has the
discretion to determine the eligible employees to whom, and the times and the
price at which, options will be granted; whether such options shall be ISOs or
Non-ISOs; the periods during which each option will be exercisable; and the
number of shares subject to each option. The Board has full authority to
interpret the 2001 Plan and to establish and amend rules and regulations
relating thereto.

     An ISO may only be granted to an employee. An optionee must remain an
employee through the exercise date. An ISO must terminate within 10 years from
the date of grant and the ISO plan must terminate within 10 years from the date
that the plan is adopted. Under the 2001 Plan, the exercise price of an option
designated as an ISO shall not be less than the fair market value of the common
stock on the date the option is granted. However, in the event an option
designated as an ISO is granted to a ten percent (10%) shareholder, such
exercise price shall be at least 110% of such fair market value and the option
must not be exercisable after the expiration of five years from the date of
grant. Exercise prices of Non-ISO options may be less than such fair market
value. The aggregate fair market value of shares subject to options granted to a
participant, which are designated as ISOs and which become exercisable in any
calendar year, shall not exceed $100,000.

     As of March 29, 2002 and June 29, 2002 no options had been awarded under
the 2001 Plan.


Item 11. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information as of June 28, 2002 with
respect to (i) the persons (including any "group" as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934), known by the Company
to be the beneficial owner of more than five percent (5%) of any class of the
Company's voting securities; (ii) each Executive Officer and Director who owns
Common Stock in the Company; and (iii) all Executive Officers and Directors as a
group. As of June 28, 2002, there were 2,303,468 shares of Common Stock issued
and outstanding.

                                       26

<PAGE>

<TABLE>
<CAPTION>

                                                       Amount of
                                                       and Nature of
                             Name and Address of       Beneficial       Percentage of Class
Title of Class               Beneficial Owner          Ownership
<S>                          <C>                       <C>                      <C>
Common Stock                 Michael Offerman             946,784                41%
$.50 Par Value               140 58th Street
                             Brooklyn, NY 11220(1)

                             Murray Sennet                 24,500               1.1%
                             1900 Manor Lane
                             Plano, TX 75093

                             Allen Gottlieb                     0                 0
                             325 Coral Way
                             Ft. Lauderdale, FL 33301

                             Robert Pittman                20,000                 *
                             45 Ocean Avenue
                             Monmouth Beach
                             NJ 07750

                             David Lopez and Nancy        278,000              12.1%
                             Lopez
                             Edge of Woods
                             P.O. Box 323
                             Southampton, NY 11968

All Officers & Directors as a Group
(4 in number)                                             991,284                43%

</TABLE>

______________________
     *  Less than 1%.

1.   43,600 shares of Common Stock are jointly owned by Mr. Offerman and his
     wife, Gail Offerman.

All shares set forth above are directly by the named individual unless otherwise
stated.

Item 12. Certain Relationships and Related Transactions

           None.

Item 13. Exhibits, Lists and Reports on Form 8-K

           (a)     Exhibits filed with Form 10-KSB:

     The following Exhibits have previously been filed with the Securities and
Exchange Commission and, pursuant to 17 C.F.R. Secs. 201.24 and 240.12b-32, are
incorporated by reference to the document referenced in

                                       27

<PAGE>

brackets following the descriptions of such Exhibits. Those Exhibits designated
by an asterisk (*) are filed herewith.

Exhibit No.                               Description

3.1              Amended and Restated Certificate of Incorporation of the
                 Company [Exhibit C-4 to Current Report filed on From 8-K, dated
                 February 27, 1991].

3.2              By-Laws of the Company Filed as Exhibit 3.2 on Report on Form
                 10-KSB for the fiscal year ended March 27, 1994.

4.1              Form of Common Stock Certificate of Company. Filed as Exhibit
                 4.1 on Report on Form 10-KSB for the fiscal year ended March
                 27, 1994.

4.2              Form of Secured Promissory Note payable, New York State Urban
                 Development Corporation [Exhibit 10B to Current Report on Form
                 8-K, dated July 22, 1992].

10.1             License Agreement between the Company and Brevetron, S.A.,
                 Lugano, Switzerland, dated January 1, 1979. Filed as Exhibit
                 10.1 on Report on Form 10-KSB for the fiscal year ended March
                 27, 1994.

10.2             Amendment to License Agreement between the Company and
                 Brevetron, S.A. dated September 28, 1982. Filed as Exhibit 10.2
                 on Report on Form 10-KSB for the fiscal year ended March 27,
                 1994.

10.3             Amendment to License Agreement between the Company and
                 Brevetron, S.A. dated September 20, 1991. Filed as Exhibit 10.3
                 on Report on Form 10-KSB for the fiscal year ended March 27,
                 1994.

10.4             Lease for premises 140 58th Street, Brooklyn, New York 11220
                 [Exhibit A to Current Report filed on Form 8-K, dated August
                 23, 1991].

10.5             Form of Loan Agreement between the Company and the New York
                 State Urban Development Corporation [Exhibit 10A to Current
                 Report filed on Form 8-K, dated July 22, 1992].

10.6             Form of Security Agreement between the Registrant and New York
                 State Urban Development Corporation [Exhibit 10C to Current
                 Report filed on Form 8-K, dated July 22, 1992].

10.7             Form of financing agreement between the Company and Milberg
                 Factors, Inc. [Exhibit C- 1 to the Current Report filed on Form
                 8-K, dated March 1, 1990].

10.8             Form of Collective Bargaining Agreement between Company and
                 Local 259 of the United Auto Workers Union, dated October 1,
                 1991.


                                       28
<PAGE>


10.9             Form of Employment Agreement between Company and Michael
                 Offerman together with Amendment No. 1 dated November 27,1997.
                 [filed as Exhibit 10.9 to Form 10KSB for the fiscal year ended
                 March 28, 1997]

10.10            Form of Employment Agreement between the Company and Ralph
                 Acello together with Amendment No. 1 dated November
                 27,1997.[filed as Exhibit 10.10 to Form 10KSB for the fiscal
                 year ended March 28, 1997]

10.11            Form of Employment Agreement between the Company and Robert
                 Knoth together with Amendment No. 1 dated November
                 27,1997.[filed as Exhibit 10.11 to Form 10KSB for the fiscal
                 year ended March 28, 1997]

10.12            Form of Employment Agreement between the Company and Joan
                 Prideaux. [filed as Exhibit 10.12 to Form 10KSB for the fiscal
                 year ended March 28, 1997]

21               Subsidiaries: None

23.1*            Consent of Jerome Rosenberg CPA, independent auditor of the
                 Company


           (b)       Reports on Form 8-K

     The Company did not file any Reports on Form 8-K during the last quarter of
the period covered by this Report.

                                       29
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                              IEH CORPORATION

                                              By: /s/ Michael Offerman
                                                  ---------------------------
                                                  Michael Offerman, President
Dated:     July 1, 2002

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/    Michael Offerman                                July 1, 2002
----------------------------------
Michael Offerman, Chairman of the
 Board and President

/s/  Robert Knoth                                      July 1, 2002
----------------------------------
Robert Knoth, Secretary and
 Treasurer

/s/   Murray Sennet                                    July 1, 2002
----------------------------------
Murray Sennet, Director


/s/  Robert Pittman                                    July 1, 2002
----------------------------------
Robert Pittman, Director


                                                       July 1, 2002
----------------------------------
Alan Gottlieb, Director


                                       31

<PAGE>

                                 IEH CORPORATION


FINANCIAL STATEMENTS EXHIBIT (ITEM 7)

                                    Contents

                        March 29, 2002 and March 30, 2001



   Page

   Number
   ------

Report of Independent Certified Public Accountant

Financial Statements:

Balance Sheets as of March 29, 2002 and March 30, 2001

Statement of Operations for the twelve months ended March 29, 2002
   and March 30, 2001
Statement of Stockholders' Equity as of March 29, 2002 and March 30, 2001

Statement of Cash Flows for the years ended March 29, 2002 and March 30, 2001

Notes to Financial Statements



                                       32
<PAGE>

                Report of Independent Certified Public Accountant
                -------------------------------------------------


Board of Directors
IEH Corporation
140 58th Street
Brooklyn, New York 11220

We have audited the accompanying balance sheets of IEH Corporation as of March
29, 2002 and March 30, 2001 and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the period
ended March 29, 2002 and March 30, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 29,
2002 and March 30, 2001 and the results of its operations and its cash flows for
each of the two years ended March 29, 2002 and March 30, 2001 in conformity with
generally accepted accounting principles.



                                              /s/ Jerome Rosenberg
                                              -------------------------------
                                              Jerome Rosenberg, CPA, P.C.

Melville, New York
June 17, 2002



                                       33

<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                                            March 29,             March 30,
                                                                              2002                   2001
                                                                            ----------            ----------

                                       ASSETS
<S>                                                                         <C>                   <C>
CURRENT ASSETS:
Cash                                                                        $    2,875            $   11,833
Accounts receivable, less allowances for doubtful accounts
   of $10,062 at March 29, 2002 and March 30, 2001                             770,884               732,150
Inventories (Note 2)                                                         1,015,539               990,420
Prepaid expenses and other current assets (Note 3)                              38,845                30,585
                                                                            ----------            ----------

          Total current assets                                               1,828,143             1,764,988
                                                                            ----------            ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated
   depreciation and amortization of $5,584,695 at March 29, 2002
   and $5,351,591 at March 30, 2001 (Note 4)                                 1,100,731             1,191,915
                                                                            ----------            ----------


OTHER ASSETS:
  Other assets                                                                  44,819                47,075
                                                                            ----------            ----------
                                                                                44,819                47,075
                                                                            ----------            ----------

Total assets                                                                $2,973,693            $3,003,978
                                                                            ==========            ==========
</TABLE>


                 See accompanying notes to financial statements

                                       34


<PAGE>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>
                                                                          March 29,          March 30,
                                                                            2002               2001
                                                                         -----------       -----------
                                                                                            (Note 1)
                            LIABILITIES AND STOCKHOLDERS' EQUITY                             Restated
                                                                                            (Note 8)
<S>                                                                      <C>               <C>
CURRENT LIABILITIES:
Accounts receivable financing (Note 5)                                   $   676,181       $   759,937
Notes payable, equipment, current portion (Note 8)                            25,332            25,355
Notes payable, current portion (Note 7)                                           --             5,750
Loans payable, current portion (Note 9)                                       25,289            83,130
Accrued corporate income taxes                                                    --             4,912
Union health & welfare, current portion (Note 14)                             30,000            96,000
Accounts payable                                                             950,503           719,309
Other current liabilities (Note 6)                                           144,430           141,423
                                                                         -----------       -----------

          Total current liabilities                                        1,851,735         1,835,816
                                                                         -----------       -----------

LONG-TERM LIABILITIES:
Pension Plan payable (Note 11)                                               244,000           244,000
Notes payable, equipment, less current portion (Note 8)                       24,773            50,107
Union health & welfare, less current portion (Note 14)                        43,828             6,689
                                                                         -----------       -----------
          Total long-term liabilities                                        312,601           300,796
                                                                         -----------       -----------

          Total liabilities                                                2,164,336         2,136,612
                                                                         -----------       -----------

STOCKHOLDERS' EQUITY:
Common stock, $.01 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at March 29, 2002
Common stock, $.50 par value; 10,000,000 shares authorized;
2,303,468 shares issued and outstanding at March 30, 2001                     23,035         1,151,734
Capital in excess of par value                                             2,744,573         1,615,874
Retained earnings (Deficit)                                               (1,958,251)       (1,900,242)
                                                                         -----------       -----------
          Total stockholders' equity                                         809,357           867,366
                                                                         -----------       -----------

          Total liabilities and stockholders' equity                     $ 2,973,693       $ 3,003,978
                                                                         ===========       ===========
</TABLE>


                 See accompanying notes to financial statements

                                       35

<PAGE>


                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS

              For the Years ended March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                           March 29,          March 30,
                                                             2002               2001
                                                          -----------       -----------
<S>                                                       <C>               <C>
REVENUE, net sales (Note 15)                              $ 4,338,012       $ 4,593,840
                                                          -----------       -----------

COSTS AND EXPENSES:

  Cost of products sold                                     3,207,645         3,261,193
  Selling, general and administrative                         808,935           871,844
  Interest expense                                            143,909           154,874
  Depreciation and amortization                               244,350           275,737
                                                          -----------       -----------
                                                            4,404,839         4,563,648
                                                          -----------       -----------


OPERATING INCOME (LOSS)                                       (66,827)           30,192

OTHER INCOME                                                   10,372               734
                                                          -----------       -----------

INCOME (LOSS) BEFORE INCOME TAXES                             (56,455)           30,926

PROVISION FOR INCOME TAXES                                     (1,554)           (4,100)
                                                          -----------       -----------

NET INCOME (LOSS)                                         $   (58,009)      $    26,826
                                                          ===========       ===========

Basic and Diluted Earnings per common share (Note 1)      $      (.03)      $      .012
                                                          ===========       ===========

Weighted average number of  common shares
  outstanding (in thousands)                                    2,303             2,303
                                                          ===========       ===========
</TABLE>


                 See accompanying notes to financial statements

                                       36

<PAGE>


                                 IEH CORPORATION

                        STATEMENT OF STOCKHOLDERS' EQUITY

              For the Years Ended March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>
                                                                              Capital in        Retained
                                                                              Excess of         Earnings
                                        Common Stock                          Par Value        (Deficit)
                                        ------------------------------       -----------      -----------
                                            Shares           Amount
                                         -----------       -----------
<S>                                        <C>             <C>              <C>              <C>
Balances, March 31, 2000                   2,303,468       $ 1,151,734      $ 1,615,874      $(2,221,574)

Gain on pension plan settlements                                                                 294,506
                                         -----------       -----------      -----------      -----------
Adjusted balances at March 31, 2000        2,303,468         1,151,734        1,615,874       (1,927,068)

Net Income: Year ended
March 30, 2001                                26,826
                                         -----------       -----------      -----------      -----------

Balances, March 30, 2001                   2,303,468         1,151,734        1,615,874       (1,900,242)

Reduction in par value of common
stock                                                       (1,128,699)       1,128,699               --

Net income: year ended
March 29, 2002                               (58,009)
                                         -----------       -----------      -----------      -----------

Balances, March 29, 2002                   2,303,468       $    23,035      $ 2,744,573      $(1,958,251)

</TABLE>


                 See accompanying notes to financial statements


                                       37

<PAGE>


                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS

                           Increase (Decrease) in Cash
              For the Years Ended March 29, 2002 and March 30, 2001


<TABLE>
<CAPTION>

                                                                               Years Ended
                                                                        March 29,       March 30,
                                                                          2002            2001
                                                                        ---------       ---------

<S>                                                                     <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                     $ (58,009)      $  26,826
                                                                        ---------       ---------

  Adjustments to reconcile net income to net cash used in
    operating activities

  Depreciation and amortization                                           244,350         275,737

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                              (38,734)         40,484
  (Increase) decrease inventories                                         (25,119)        (14,251)
  (Increase) decrease in prepaid expenses and other current assets         (8,260)        (14,373)
  (Increase) decrease in other assets                                       2,256            (697)

  (Decrease) increase in accounts payable                                 231,194         (60,377)
  (Decrease) increase in other current liabilities                          3,007          47,770
  Increase in accrued corporate income taxes                               (4,912)        (11,108)
  (Decrease) in due to union pension & health & welfare                   (28,861)        (30,000)
                                                                        ---------       ---------

               Total adjustments                                          374,921         233,185
                                                                        ---------       ---------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                      316,912         260,011
                                                                        ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                          (153,166)       (209,499)
                                                                        ---------       ---------

          NET CASH USED IN INVESTING ACTIVITIES                         $(153,166)      $(209,499)
                                                                        ---------       ---------
</TABLE>



                 See accompanying notes to financial statements

                                       38
<PAGE>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS

                          Increase (Decrease) in Cash
             For the Years Ended March 29, 2002 and March 30, 2001

<TABLE>
<CAPTION>

                                                         March 29,        March 30,
                                                           2002             2001
                                                         ---------       ---------
<S>                                                      <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable                      $ (31,107)      $ (60,960)
Proceeds from accounts receivable financing                (83,756)         70,162
Principal payments on loan payable                         (57,841)        (51,926)
                                                         ---------       ---------

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES       (172,704)        (42,724)
                                                         ---------       ---------

INCREASE (DECREASE) IN CASH                                 (8,958)          7,788

CASH, beginning of period                                   11,833           4,045
                                                         ---------       ---------

CASH, end of period                                      $   2,875       $  11,833
                                                         =========       =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
cash paid during the year for:

     Interest                                            $ 134,740       $ 149,273
                                                         =========       =========

     Income Taxes                                        $   4,175       $   4,100
                                                         =========       =========
</TABLE>


                 See accompanying notes to financial statements


                                       39
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

                     Description of Business:

The Company is engaged in the design, development, manufacture and distribution
of high performance electronic printed circuit connectors and specialized
interconnection devices. Electronic connectors and interconnection devices are
used in providing electrical connections between electronic component
assemblies. The Company develops and manufactures connectors which are designed
for a variety of high technology and high performance applications, and are
primarily utilized by those users who require highly efficient and dense (the
space between connection pins with the connector) electrical connections.

The Company is continuously redesigning and adapting its connectors to meet and
keep pace with developments in the electronics industry and has, for example,
developed connectors for use with flex-circuits now being used in aerospace
programs, computers, air-borne communications systems, testing systems and other
areas. The Company also services its connectors to meet specified product
requirements.

Accounting Period:

The Company maintains an accounting period based upon a 52-53 week year which
ends on the nearest Friday in business days to March 31st. The year ended March
29, 2002 was comprised of 52 weeks and the year ended March 30, 2001 was
comprised of 53 weeks.

Revenue Recognition:

Revenues are recognized at the shipping date of the Company's products.

The Company's policy with respect to customer returns and allowances as well as
product warranty is as follows:

The Company will accept a return of defective product within one year from
shipment for repair or replacement at the Company's option. If the product is
repairable, the Company at its own cost will repair and return to the customer.
If unrepairable, the Company will either offer an allowance against payment or
will reimburse the customer for the total cost of product.

Most of the Company's products are custom ordered by customers for a specific
use. The Company provides engineering services as part of the relationship with
its customers in developing the custom product. The Company is not obligated to
provide such engineering service to its customers. The Company does not charge
separately for these services.

Inventories:

Inventories are stated at cost, on a first-in, first-out basis, which does not
exceed market value.


                                       40

<PAGE>


                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

Concentration of Credit Risk:

The Company maintains cash balances at one bank. Amounts on deposit are insured
by the Federal Deposit Insurance Corporation up to $100,000 in aggregate. There
were no uninsured balances at either March 29, 2002 or March 30, 2001.

Property, Plant and Equipment:

Property, plant and equipment is stated at cost less accumulated depreciation
and amortization. The Company provides for depreciation and amortization using
the Modified Accelerated Cost Recovery System (MACRS) method over the estimated
useful lives (5-7 years) of the related assets.

Maintenance and repair expenditures are charged to operations, and renewals and
betterments are capitalized. Items of property, plant and equipment which are
sold, retired or otherwise disposed of are removed from the asset and
accumulated depreciation or amortization account. Any gain or loss thereon is
either credited or charged to operations.

Income Taxes:

The Company follows the policy of treating investment tax credits as a reduction
in the provision for federal income tax in the year in which the credit arises
or may be utilized. Deferred income taxes arise from temporary differences
resulting from different depreciation methods used for financial and income tax
purposes. The Company has adopted Statement of Financial Accounting Standards
(SFAS) No. 109, "Accounting for Income Taxes".

Net Income Per Share:

The Company has adopted the provisions of SFAS No. 128, "Earnings Per Share",
which requires the disclosure of "basic" and "diluted" earnings (loss) per
share. Basic earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during each period. Diluted
earnings per share is similar to basic earnings per share except that the
weighted average number of common shares outstanding is increased to reflect the
dilutive effect of potential common shares, such as those issuable upon the
exercise of stock or warrants, as if they had been issued. For the years ended
March 29, 2002 and March 30, 2001, there were no items of potential dilution
that would impact on the computation of diluted earnings or loss per share.

Fair Value of Financial Instruments:

The carrying value of the Company's financial instruments, consisting of
accounts receivable, accounts payable, and borrowings, approximate their fair
value due to the relatively short maturity (three months) of these instruments.

                                       41

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, revenues and expenses,
and disclosure of contingent assets and liabilities at the date of the financial
statements. Actual amounts could differ from those estimates.

Impairment of Long-Lived Assets:

SFAS No. 121, "Accounting For The Impairment of Long-Lived Assets To Be Disposed
Of", requires that long-lived assets and certain identifiable intangibles to be
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company has adopted SFAS No. 121. There were no long-lived
asset impairments recognized by the Company for the years ended March 29, 2002
and March 30, 2001.

Reporting Comprehensive Income:

The Company has adopted the provisions of SFAS No. 130, "Reporting Comprehensive
Income". This statement established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in an entity's financial statements. This Statement requires an entity to
classify items of other comprehensive income by their nature in a financial
statement and display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid-in capital in the equity
section of a statement of financial position. There were no material items of
comprehensive income to report for the years ended March 29, 2002 and March 30,
2001.

Segment Information:

The Company has adopted the provisions of SFAS No. 131, "Disclosures About
Segment of An Enterprise and Related Information." This Statement requires
public enterprises to report financial and descriptive information about its
reportable operating segments and establishes standards for related disclosures
about product and services, geographic areas, and major customers. The adoption
of SFAS No. 131 did not affect the Company's presentation of its results of
operations or financial position.

Effect of New Accounting Pronouncements:

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101 ("SAB No. 101"), Revenue Recognition in Financial Statements,
which summarizes certain of the staff's views on revenue recognition. The
Company's revenue recognition policies are in accordance with SAB No. 101.


                                       42
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 2 - INVENTORIES:

                     Inventories are comprised of the following:


                                         March 29,       March 30,
                                           2002            2001
                                        ----------      ----------

      Raw materials                     $  675,446      $  714,634
      Work in progress                     228,912         159,741
      Finished goods                       111,181         116,045
                                        ----------      ----------

                                        $1,015,539      $  990,420
                                        ==========      ==========

Note 3 - PREPAID EXPENSES AND OTHER CURRENT ASSETS:

Prepaid expenses and other current assets are comprised of the following:


                                             March 29,   March 30,
                                              2002         2001
                                             -------      -------

      Prepaid insurance                      $32,574       $18,571
      Prepaid corporate taxes                  3,925         3,640
      Other current assets                     2,346         8,374
                                             -------       -------
                                             $38,845       $30,585
                                             =======       =======


Note 4 - PROPERTY, PLANT AND EQUIPMENT:

                  Property, plant and equipment are as follows:


                                         March 29,       March 30,
                                           2002            2001
                                        ----------      ----------
      Computers                         $  189,288      $  187,248
      Leasehold improvements               585,831         585,831
      Machinery and equipment            4,175,282       4,050,066
      Tools and dies                     1,580,217       1,554,307
      Furniture and fixture                154,808         154,808
      Transportation equipment                  --          11,246
                                        ----------      ----------
                                         6,685,426       6,543,506

Less:  accumulated
       depreciation and amortization     5,584,695       5,351,591
                                        ----------      ----------

                                        $1,100,731      $1,191,915
                                        ==========      ==========


                                       43

<PAGE>

Note 5 - ACCOUNTS RECEIVABLE FINANCING:

The Company entered into an accounts receivable financing agreement whereby it
can borrow up to eighty percent of its eligible receivables (as defined in the
agreement) at an interest rate of 2 1/2 % above The Chase Manhattan Bank's
publicly announced rate 4.75% at March 29, 2002, with a maximum of 12% per
annum. The agreement has an initial term of one year and will automatically
renew for successive one year terms, unless terminated by the Company or Lender
upon receiving sixty days prior notice. The loan is secured by the Company's
accounts receivable and inventories.

Note 6 - OTHER CURRENT LIABILITIES:

Other current liabilities are comprised of the following:


                                         March 29,        March 30,
                                           2002             2001
                                         --------         --------

Payroll and vacation accruals            $ 67,920         $ 66,448
Sales commissions                          14,339           10,611
Other                                      62,171           64,364
                                         --------         --------

                                         $144,430         $141,423
                                         ========         ========

Note 7 - NOTES PAYABLE:

The Company was in arrears in the amount of $236,000 to the Apple Industrial
Development Corp. formerly New York City Economic Development Corporation
("NYCEDC") for rent due for its offices and manufacturing facilities. In May
1997, the Company and the NYCEDC negotiated an agreement for the Company to pay
off its indebtedness over a 48 month period, by the Company issuing notes
payable to NYCEDC. The note bore interest at the rate of 8.25% per annum. The
Company had repaid this note in full as of June 29, 2001.


                                       44
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 8 - NOTES PAYABLE EQUIPMENT:

The Company financed the acquisition of new computer equipment and software with
notes payable. The notes are payable over a sixty month period. The balance
remaining at March 29, 2002 amounted to $50,105.

               Aggregate future principal payments are as follows:


         Fiscal Year Ending March:
         2003                                        $  25,332
         2004                                           16,978
         2005                                            6,745
         2006                                            1,050
         ----                                       ----------
                                                    $   50,105
                                                    ==========

Note 9 - LOAN PAYABLE:

     On July 22, 1992, the Company obtained a loan of $435,000 from the New York
State Urban Development Corporation ("UDC"), collateralized by machinery and
equipment. The loan is payable over ten years, with interest rates progressively
increasing from 4% to 8% per annum.

The balance remaining at March 29, 2002 was $25,289.

Aggregate future principal payments are as follows:


      Fiscal Year Ending March 31:
      2003                                          $   25,289
                                                    ==========

In April 1997, the Company was informed by the UDC that the loan was sold and
conveyed to WAMCO XXIV, Ltd. All the terms and conditions of the loan remained
in effect.

As of March 29, 2002, the Company had failed to meet one of the financial
covenants of the loan agreement; namely that the "Company shall be obligated to
maintain a tangible net worth of not less than $1,300,000 and the Company shall
be obligated to maintain a ratio of current assets to current liabilities of 1.1
to 1.0.

The Company reported tangible net worth of $809,357. The ratio of current assets
to current liabilities was .99 to 1.0.

The Company has applied for additional waivers of this covenant. Neither the UDC
or WAMCO XXIV has acted on these requests. There are no assurances that the
Company will receive any additional waivers of this covenant. Should the Company
not receive any additional waivers, then it will be deemed to be in default of
this loan obligation and the loan plus interest will become due and payable,
accordingly the entire balance has been classified as a current liability in the
accompanying balance sheet.


                                       45

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 - INCOME TAXES:

The components of the deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>

                                                         March 29,         March 30,
                                                           2002              2001
                                                        -----------       -----------
<S>                                                     <C>               <C>
Deferred tax assets:

Net operating loss carryforwards                        $ 2,085,929       $ 2,112,755
                                                        -----------       -----------

Gross deferred assets tax assets                          2,085,929         2,112,755

Deferred tax liabilities:

State income taxes                                          (82,397)          (83,557)
                                                        -----------       -----------

Net deferred tax assets before valuation allowance        2,003,532         2,029,198

Valuation allowance                                      (2,003,532)       (2,029,198)
                                                        -----------       -----------

Net deferred tax assets                                 $         0       $         0
                                                        ===========       ===========
</TABLE>

At March 31, 2000 , the Company established a 100% valuation allowance for the
net deferred tax assets, as management could not determine that it was more
likely than not that the deferred tax assets could be realized. The change in
valuation allowance amounted to $25,666 for the year ended March 29, 2002.

As of March 29, 2002, the Company has available Federal net operating loss
carryforwards (NOL's) totaling approximately $2,085,929 which expire at various
times through March 31, 2010, for State and Local purposes, the company has
available NOL's approximating $2,019,544 which expire at various times through
March 31, 2010.

Utilization of the NOL's may be limited pursuant to Internal Revenue Code
Section 382 should significant changes to the existing ownership of the Company
occur.


                                       46
<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 -            INCOME TAXES: (continued)

A reconciliation of income taxes computed at the Federal statutory rate as
compared to income tax expense at the effective income tax is as follows:


                                                 March 29,        March 30,
                                                   2002             2001
                                                ----------       ----------

Federal statutory income tax (benefit) rate       (34.0)%          (34.0) %

State tax benefit, net of Federal liability       (12.2)%          (12.2) %

Net change in valuation allowance                   46.2%            46.2 %

Effective income tax (benefit) rate                ( - )%           ( - ) %


Note 11 - PENSION PLAN-SALARIED PERSONNEL:

On June 30, 1995, the Company applied to the Pension Benefit Guaranty
Corporation ("PBGC") to have the PBGC assume all of the Company's
responsibilities and liabilities under its Salaried Pension Plan. On April 26,
1996, the PBGC determined that the Salaried Pension Plan did not have sufficient
assets available to pay benefits which were and are currently due under the
terms of the Plan.

The PBGC further determined that pursuant to the provisions of the Employment
Retirement Income Security Act of 1974, as amended ("ERISA"), that the Plan must
be terminated in order to protect the interests of the Plan's participants.
Accordingly, the PBGC proceeded pursuant to ERISA to have the Plan terminated
and the PBGC appointed as statutory trustee, and to have July 31, 1995
established as the Plan's termination date.

The Company and the PBGC negotiated a settlement on the entire matter and on
July 2, 2001, an agreement was reached whereby the Company's liability to the
PBGC was reduced to $244,000. The Company will make monthly payments to the PBGC
as follows:


      September 1, 2003 to August 1, 2004            $2,000 per month
      September 1, 2004 to August 1, 2006            $3,000 per month
      September 1, 2006 to August 1, 2007            $4,000 per month

In addition, to the above referenced monthly payments, the Company will make
balloon payments of $25,000 each on the following dates:


      January 1, 2004
      May 1, 2004
      May 1, 2005
      January 1, 2006


                                       47
<PAGE>

The Company will also grant the PBGC a lien on the Company's machinery and
equipment, subject to the pre- existing liens in favor of the UDC.



                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 11 - PENSION PLAN-SALARIED PERSONNEL (continued)

As a result of this agreement the amount due the PBGC has been restated to
$244,000 and is reported as a long term liability. The resultant gain of
$294,506 was reclassified and accounted for as a charge to opening retained
earnings as follows:


Opening retained earnings-March 31, 2000                  $(2,221,574)
Gain on pension plan settlement                               294,506
                                                          -----------

Adjusted opening retained earnings March 31, 2000          (1,927,068)

Net income for the year ended March 30, 2001                   26,826
                                                          -----------
Adjusted retained earnings balance at March 30, 2001       (1,900,242)

Net loss for the Year ended March 29, 2002                    (58,009)
                                                          -----------

Balance at March 29, 2002                                  (1,958,251)
                                                          ===========

Note 12 - CHANGES IN STOCKHOLDERS' EQUITY:

Retained earnings (deficit) increased by $58,009, which represents the loss for
the year.

The Company's shareholders voted on September 21, 2001 to change the par value
of the Company's common stock from $.50 par value per share to $.01 par value
per share.

As a result of the above change the Company reduced the book value of it's
common stock and increased capital in excess of par as follows:


                               Par Value                          Par Value
                                 $.50            Change              $.01
                              -----------      -----------       -----------
Common Stock                  $ 1,151,734      $(1,128,699)      $    23,035
Capital in excess of par        1,615,874        1,128,699         2,744,573
                              -----------      -----------       -----------
Total equity                  $ 2,767,608      $         0       $ 2,767,608
                              ===========      ===========       ===========


Note 13- 2001 EMPLOYEE STOCK OPTION PLAN:


                                       48
<PAGE>

On September 21, 2001 the Company's shareholders approved the adoption of the
Company's 2001 Employees Stock Option Plan to provide for the grant of options
to purchase up to 750,000 shares of the Company's common stock to all employees,
including senior management.

Options granted to employees under this plan may be designated as options which
qualify for incentive stock option treatment under Section 422A of the Internal
Revenue Code, or options which do not so qualify.


                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 13- 2001 EMPLOYEE STOCK OPTION PLAN (continued)


Under this plan, the exercise price of an option designated as an Incentive
Stock Option shall not be less than the fair market value of the Company's
common stock on the day the option is granted. In the event an option designated
as an incentive stock option is granted to a ten percent (10%) shareholder, such
exercise price shall be at least 110 Percent (110%) of the fair market value or
the Company's common stock and the option must not be exercisable after the
expiration of five years from the day of the grant.

Exercise prices of non incentive stock options may be less than the fair market
value of the Company's common stock.

The aggregate fair market value of shares subject to options granted to a
participant(s), which are designated as incentive stock options, and which
become exercisable in any calendar year, shall not exceed $100,000. As of March
29, 2002 no options had been granted under the plan.

Note 14 - COMMITMENTS:

The Company exercised its option to renew its lease on the premises for 10
years. The original lease ran through August 23, 2001.

The Company is obligated under this renewal through August 23, 2011, at minimum
annual rentals as follows:


                    Fiscal year ending March:

                    2003                          $111,600
                    2004                           111,600
                    2005                           111,600
                    2006                           111,600
                    2007                           111,600
                    2008                           111,600
                    2009                           111,600
                    2010                           111,600
                    2011                            74,400
                                                  --------

                                                  $967,200
                                                  ========


                                       49
<PAGE>

The rental expense for the year ended March 29, 2002 for this lease was $
111,482.

The terms of the renewal are presently being negotiated by the Company and its
landlord, Apple Industrial Development, Corp.

(See Note 7 - Notes Payable relating to rent arrears agreement)

The Company has a collective bargaining multi-employer pension plan with the
United Auto Workers of America, Local 259. Contributions are made in accordance
with a negotiated labor contract and are based on the number of covered
employees employed per month. With the passage of the Multi-Employer Pension
Plan

                                       50

<PAGE>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 14 - COMMITMENTS (continued)

Amendments Act of 1990 (The "Act"), the Company may become subject to
liabilities in excess of contributions made under the collective bargaining
agreement. Generally, these liabilities are contingent upon the termination,
withdrawal, or partial withdrawal from the Plan.

The Company has not taken any action to terminate, withdraw or partially
withdraw from the Plan nor does it intend to do so in the future. Under the Act,
liabilities would be based upon the Company's proportional share of the Plan's
unfunded vested benefits which is currently not available. The amount of
accumulated benefits and net assets of such Plan also is not currently available
to the Company. The total contributions charged to operations under this pension
plan were $38,384 for the year ended March 29, 2002 and $35,707 for the year
ended March 30, 2001.


As of March 29, 2002, the Company reported arrears with respect to its
contributions to the Union's health and welfare plan. The amount due the health
and welfare plan was $73,828.

The total amount due of $73,828 is reported on the accompanying balance sheet as
follows: $30,000 as a current liability and $43,828 as a long term liability.

In December 1993, the Company and Local 259 entered into a verbal agreement
whereby the Company would satisfy this debt by the following payment schedule:

The sum of $2,500 will be paid by the Company each month in satisfaction of the
current arrears until this total debt has been paid. Under this agreement, the
projected payment schedule for arrears will satisfy the total debt in 30 months.


Note 15 - REVENUES FROM MAJOR CUSTOMERS:

In the fiscal year ended March 29, 2002, approximately 17% of the Company's
total revenues were earned from one customer. Total sales to this customer were
approximately $730,000. No other customer accounted for over 10% of the
Company's sales. Accounts receivable as of March 29, 2002, included a receivable
from one customer which amounted to 10% or more of the total accounts
receivable.


                                       51